{
  "title": "IMF Executive Board Completes Seventh PSI Review, Second Review Under the Standby Credit Facility, and Concludes 2017 Article IV Consultation with Rwanda",
  "publication": "IMF News, July 12, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/07/12/pr17274-imf-imf-executive-board-completes-seventh-psi-review-on-rwanda",
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  "summary": "Executive Board completed the seventh review of Rwanda’s performance under the Policy Support Instrument (PSI) and the second review of the arrangement under the Standby Credit Facility (SCF).",
  "publishDate": "2017-07-12",
  "sections": [
    {
      "heading": "Program completion and financing",
      "content": "- Executive Board completed the seventh review of Rwanda’s performance under the Policy Support Instrument (PSI) and the second review of the arrangement under the Standby Credit Facility (SCF).\n- Completion of the second SCF review enables disbursement of US$25.06 million (SDR 18.0225 million), bringing total disbursements under the arrangement to SDR 126.16 million, with the remainder tied to the next and final review.\n- The Board approved on June 8, 2016 an 18-month SCF arrangement with access of about US$200.49 million (SDR 144.18 million) or 90 percent of Rwanda’s quota and extension of Rwanda’s PSI-supported program through end-2017.\n- Rwanda’s PSI-supported program was originally approved on December 2, 2013."
    },
    {
      "heading": "Macroeconomic developments and outlook",
      "content": "- Growth:\n  - Growth in 2016 was 5.9 percent, down from 2015.\n  - Growth is expected to recover over 2017-18, owing to good rains and expanding domestic production.\n- Inflation:\n  - Inflation spiked in early 2017 due to a food supply shock, but is now abating.\n- External sector:\n  - Rwanda’s external trade deficit was lower than anticipated in 2016, following a strong pick up in goods and services exports, combined with reduced demand for imports.\n- Policy implementation:\n  - Program implementation has been strong, with almost all targets met.\n  - Exchange rate flexibility has been the central tool of policy adjustment, supported by structural reforms to bolster domestic production.\n  - Performance under the SCF arrangement and PSI-supported program has been strong, with almost all program targets and structural measures set through end-March achieved."
    },
    {
      "heading": "Risks, vulnerabilities, and priorities",
      "content": "- Key vulnerabilities highlighted:\n  - The Rwandan economy remains vulnerable to external shocks.\n  - Main risks to economic growth: weather shocks affecting agriculture, regional security issues, and unexpected shifts in external development assistance.\n- Reserve buffers:\n  - It will be important to rebuild foreign exchange reserve buffers to enhance resilience to external shocks.\n- Fiscal and revenue concerns:\n  - Authorities should ensure recently-introduced tax incentives to boost domestic production are well-targeted and do not unduly weaken the tax base.\n  - Directors supported planned tax expenditure analysis to ensure incentives are well-targeted.\n- Monetary policy framework:\n  - Directors supported the authorities’ plan to move to an interest‑rate based monetary policy framework.\n  - Preconditions recommended include deepening interbank and domestic debt markets and providing clear signals about monetary policy priorities to help anchor inflation expectations.\n- Structural and development priorities:\n  - To reach upper middle income status, it will be important to boost the role of the private sector as the main engine for growth and investment.\n  - Continue reorienting the economy toward higher value-added activity; bolster gender equality through greater economic inclusion; increase access to affordable financial services; and foster domestic securities markets.\n  - Emphasized importance of investment in education and vocational training targeted at building skills to meet rapidly evolving labor needs."
    },
    {
      "heading": "Executive Board assessment",
      "content": "- Directors commended Rwanda’s achievements: structural transformation, high and inclusive growth, reduced poverty and gender inequality, and an attractive business environment.\n- Directors welcomed decisive steps to address external imbalances and encouraged continued exchange rate flexibility as the main adjustment tool.\n- Directors welcomed improved domestic revenue mobilization and encouraged balancing incentives for production with revenue mobilization needs.\n- Directors commended progress in improving the business environment and encouraged continued efforts to boost investment."
    },
    {
      "heading": "Key indicators (selected figures from Table 1)",
      "content": "- Real GDP: 2015 = 8.9; 2016 = 5.9; 2017 = 6.2; 2018 = 6.8; 2019 = 7.3\n- GDP deflator: 2015 = 0.1; 2016 = 4.9; 2017 = 7.4; 2018 = 5.5; 2019 = 4.6\n- CPI (period average): 2015 = 2.5; 2016 = 5.7; 2017 = 7.1; 2018 = 6.0; 2019 = 5.0\n- CPI (end of period): 2015 = 4.5; 2016 = 7.0\n- Core inflation (period average) (defined as excluding fresh products and energy): 2015 = 2.1; 2016 = 4.1\n- Terms of trade (deterioration, -): 2015 = 5.3; 2016 = 6.3; 2017 = 6.1; 2018 = -4.1; 2019 = 3.6\n- Broad money growth: 2015 = 21.1; 2016 = 7.6; 2017 = 13.0; 2018 = 13.2\n- Reserve money growth: 2015 = 16.2; 2016 = 10.9; 2017 = 11.1\n- Credit to non-government sector: 2015 = 30.1; 2016 = 7.8; 2017 = 17.9; 2018 = 14.2\n- M3/GDP (percent): 2015 = 24.9; 2016 = 24.1; 2017 = 23.9; 2018 = 24.0\n- General government total revenue and grants (percent of GDP): 2015 = 24.7; 2016 = 23.7; 2017 = 22.1; 2018 = 21.9; 2019 = 21.7\n- General government expenditure (percent of GDP): 2015 = 29.3; 2016 = 27.4; 2017 = 26.2; 2018 = 25.8; 2019 = 25.6\n- Primary balance (percent of GDP): 2015 = -0.3; 2016 = -2.8; 2017 = -2.9; 2018 = -2.7\n- Overall balance (percent of GDP): 2015 = -4.6; 2016 = -3.8; 2017 = -3.9\n- Net domestic borrowing (percent of GDP): 2015 = 1.1; 2016 = 0.8; 2017 = 0.0; 2018 = 0.2; 2019 = 0.5\n- Total public debt incl. guarantees (percent of GDP): 2015 = 36.4; 2016 = 44.5; 2017 = 45.7; 2018 = 47.1; 2019 = 48.7\n- External public debt (percent of GDP): 2015 = 27.9; 2016 = 35.8; 2017 = 38.1; 2018 = 40.2; 2019 = 42.1\n- Investment (percent of GDP): 2015 = 25.9; 2016 = 24.6; 2017 = 22.6\n  - Government investment: 2015 = 12.6; 2016 = 10.6; 2017 = 9.4; 2018 = 9.9; 2019 = 9.5\n  - Nongovernment investment: 2015 = 13.3; 2016 = 15.0; 2017 = 14.6; 2018 = 14.7; 2019 = 13.1\n- Savings (percent of GDP) (table entries present multiple numbers): 2015 = 8.0; 2016 = 10.2; 2017 = 9.3; 2018 = 3.5; 2019 = 3.1; additional columns show 3.0, 3.2, 3.9, 6.4 (as listed)\n- Exports (goods and services, percent of GDP): 2015 = 18.4; 2016 = 19.0; 2017 = 20.3; 2018 = 20.6\n- Imports (goods and services, percent of GDP): 2015 = 35.6; 2016 = 37.0; 2017 = 33.1; 2018 = 34.3; 2019 = 34.2 (note: imports for 2016 reflect purchases of two aircrafts)\n- Current account balance (incl. grants, percent of GDP): 2015 = -13.4; 2016 = -14.4; 2017 = -10.2; 2018 = -11.2; 2019 = -9.9\n- Current account balance (excl. grants, percent of GDP): 2015 = -17.8; 2016 = -18.5; 2017 = -13.8; 2018 = -14.6; 2019 = -13.3\n- Gross international reserves: 2015 = 0.9 (in billions of U.S.$); 2016 = 1.0; 2017 = 1.2\n  - Reserves in months of next year’s imports: 2015 = 3.7\n- GDP at current market prices (Rwanda francs, billion): 2015 = 5,956; 2016 = 6,618; 2017 = 7,548; 2018 = 8,505; 2019 = 9,544\n- GDP at current market prices (US$, billion): 2015 = 8.3; 2016 = 8.4\n- GDP per capita (US$): 2015 = 732; 2016 = 729\n- Population (millions): 2015 = 11.3; 2016 = 11.5; 2017 = 11.8; 2018 = 12.1; 2019 = 12.8\n\nSource: IMF Press Release No. 17/274 (July 12, 2017).\n\n---\n\n\n References\n\n- PRESS CENTER\n- Press Release No. 16/270\n- Press Release No.13/483\n- http://www.imf.org/external/np/exr/facts/psi.htm\n- www.imf.org/rwanda\n- http://www.imf.org/external/np/exr/facts/scf.htm\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/07/12/pr17274-imf-imf-executive-board-completes-seventh-psi-review-on-rwanda"
    }
  ],
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    "[Structured JSON version](/en/news/articles/2017/07/12/pr17274-imf-imf-executive-board-completes-seventh-psi-review-on-rwanda/index.json)",
    "[Bundle manifest](/en/news/articles/2017/07/12/pr17274-imf-imf-executive-board-completes-seventh-psi-review-on-rwanda/bundle-manifest.json)",
    "Published: July 12, 2017",
    "Executive Board completed the seventh review of Rwanda’s performance under the Policy Support Instrument (PSI) and the second review of the arrangement under the Standby Credit Facility (SCF).",
    "Completion of the second SCF review enables disbursement of US$25.06 million (SDR 18.0225 million), bringing total disbursements under the arrangement to SDR 126.16 million, with the remainder tied to the next and final review.",
    "The Board approved on June 8, 2016 an 18-month SCF arrangement with access of about US$200.49 million (SDR 144.18 million) or 90 percent of Rwanda’s quota and extension of Rwanda’s PSI-supported program through end-2017.",
    "Rwanda’s PSI-supported program was originally approved on December 2, 2013.",
    "Growth:",
    "Inflation:",
    "External sector:",
    "Policy implementation:",
    "Key vulnerabilities highlighted:",
    "Reserve buffers:",
    "Fiscal and revenue concerns:",
    "Monetary policy framework:",
    "Structural and development priorities:",
    "Directors commended Rwanda’s achievements: structural transformation, high and inclusive growth, reduced poverty and gender inequality, and an attractive business environment.",
    "Directors welcomed decisive steps to address external imbalances and encouraged continued exchange rate flexibility as the main adjustment tool.",
    "Directors welcomed improved domestic revenue mobilization and encouraged balancing incentives for production with revenue mobilization needs.",
    "Directors commended progress in improving the business environment and encouraged continued efforts to boost investment.",
    "Real GDP: 2015 = 8.9; 2016 = 5.9; 2017 = 6.2; 2018 = 6.8; 2019 = 7.3",
    "GDP deflator: 2015 = 0.1; 2016 = 4.9; 2017 = 7.4; 2018 = 5.5; 2019 = 4.6",
    "CPI (period average): 2015 = 2.5; 2016 = 5.7; 2017 = 7.1; 2018 = 6.0; 2019 = 5.0",
    "CPI (end of period): 2015 = 4.5; 2016 = 7.0",
    "Core inflation (period average) (defined as excluding fresh products and energy): 2015 = 2.1; 2016 = 4.1",
    "Terms of trade (deterioration, -): 2015 = 5.3; 2016 = 6.3; 2017 = 6.1; 2018 = -4.1; 2019 = 3.6",
    "Broad money growth: 2015 = 21.1; 2016 = 7.6; 2017 = 13.0; 2018 = 13.2",
    "Reserve money growth: 2015 = 16.2; 2016 = 10.9; 2017 = 11.1",
    "Credit to non-government sector: 2015 = 30.1; 2016 = 7.8; 2017 = 17.9; 2018 = 14.2",
    "M3/GDP (percent): 2015 = 24.9; 2016 = 24.1; 2017 = 23.9; 2018 = 24.0",
    "General government total revenue and grants (percent of GDP): 2015 = 24.7; 2016 = 23.7; 2017 = 22.1; 2018 = 21.9; 2019 = 21.7",
    "General government expenditure (percent of GDP): 2015 = 29.3; 2016 = 27.4; 2017 = 26.2; 2018 = 25.8; 2019 = 25.6",
    "Primary balance (percent of GDP): 2015 = -0.3; 2016 = -2.8; 2017 = -2.9; 2018 = -2.7",
    "Overall balance (percent of GDP): 2015 = -4.6; 2016 = -3.8; 2017 = -3.9",
    "Net domestic borrowing (percent of GDP): 2015 = 1.1; 2016 = 0.8; 2017 = 0.0; 2018 = 0.2; 2019 = 0.5",
    "Total public debt incl. guarantees (percent of GDP): 2015 = 36.4; 2016 = 44.5; 2017 = 45.7; 2018 = 47.1; 2019 = 48.7",
    "External public debt (percent of GDP): 2015 = 27.9; 2016 = 35.8; 2017 = 38.1; 2018 = 40.2; 2019 = 42.1",
    "Investment (percent of GDP): 2015 = 25.9; 2016 = 24.6; 2017 = 22.6",
    "Savings (percent of GDP) (table entries present multiple numbers): 2015 = 8.0; 2016 = 10.2; 2017 = 9.3; 2018 = 3.5; 2019 = 3.1; additional columns show 3.0, 3.2, 3.9, 6.4 (as listed)",
    "Exports (goods and services, percent of GDP): 2015 = 18.4; 2016 = 19.0; 2017 = 20.3; 2018 = 20.6",
    "Imports (goods and services, percent of GDP): 2015 = 35.6; 2016 = 37.0; 2017 = 33.1; 2018 = 34.3; 2019 = 34.2 (note: imports for 2016 reflect purchases of two aircrafts)",
    "Current account balance (incl. grants, percent of GDP): 2015 = -13.4; 2016 = -14.4; 2017 = -10.2; 2018 = -11.2; 2019 = -9.9",
    "Current account balance (excl. grants, percent of GDP): 2015 = -17.8; 2016 = -18.5; 2017 = -13.8; 2018 = -14.6; 2019 = -13.3",
    "Gross international reserves: 2015 = 0.9 (in billions of U.S.$); 2016 = 1.0; 2017 = 1.2",
    "GDP at current market prices (Rwanda francs, billion): 2015 = 5,956; 2016 = 6,618; 2017 = 7,548; 2018 = 8,505; 2019 = 9,544",
    "GDP at current market prices (US$, billion): 2015 = 8.3; 2016 = 8.4",
    "GDP per capita (US$): 2015 = 732; 2016 = 729",
    "Population (millions): 2015 = 11.3; 2016 = 11.5; 2017 = 11.8; 2018 = 12.1; 2019 = 12.8",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No. 16/270](https://www.imf.org/external/np/sec/pr/2016/pr16270.htm)",
    "[Press Release No.13/483](http://www.imf.org/external/np/sec/pr/2013/pr13483.htm)",
    "[http://www.imf.org/external/np/exr/facts/psi.htm](http://www.imf.org/external/np/exr/facts/psi.htm)",
    "[www.imf.org/rwanda](http://www.imf.org/rwanda)",
    "[http://www.imf.org/external/np/exr/facts/scf.htm](http://www.imf.org/external/np/exr/facts/scf.htm)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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